The European Bank for Reconstruction and Development has succeeded in changing the supervisory board at Victoriabank, a Moldovan bank which had been taken over by corporate raiders.
An extraordinary meeting of shareholders called by the EBRD has elected by cumulative voting a new supervisory board, which will have the power to replace the managing board. Shareholders of Victoriabank have not had formal control over the bank’s management since last autumn.
Victoriabank was “raided” – the term used in the former USSR for a fully or partly illegal attempt to take over a company – by groups planning to take control of the bank, head of the board of directors Vlad Turcanu warned in September 2014, pointing to suspicious overnight court decisions that blocked shareholder control. Chief executive Natalia-Politov Cangas used the court decisions to have her mandate renewed last autumn against the will of shareholders.
The EBRD, which has a 15% stake in Victoriabank, welcomed the results of the meeting. It has announced plans to raise its shareholding in the bank to a majority and restore corporate governance but has complained that it was being blocked by political forces protecting the corporate raiders. The National Bank of Moldova, which had supported the EBRD, will now have to approve the new board members.
“The election of a new supervisory board is a major first step towards restoring corporate governance at this systemically important Moldovan bank. It will help prevent potential abuse and pave the way for a thorough financial assessment,” said Henry Russell, EBRD Director for Financial Institutions in Moldova, Ukraine, Belarus and Western Balkans.
Two of the seven board members – Ionuț Pătrăhău and Gavin N. Ryan, were proposed by the bank. Experienced bankers with international exposure, the EBRD said they will act as independent board members in the interests of Victoriabank and all its shareholders.
The members of the new supervisory board at Victoriabank are:
The goal of consolidating Victoriabank as a commercially disciplined private bank with high standards of corporate governance and integrity has been impeded since June 2006 when the control of Victoriabank’s supervisory board passed to non-transparent shareholders, unacceptable to the EBRD and to other key shareholders, according to the EBRD.
EBRD owns 15.06% of Victoriabank and Alpha Bank Romania holds 12.5%. The family of the bank’s founder, Victor Turcanu, including his former wife Valentina Turcanu, Valentina’s sister Galina Proidisvet, and Galina’s daughter Artemenco Elena, control some 25%.
The bank’s largest shareholder is Insidown LTD, registered in Cyprus, with 39.2%. The final beneficiary of the stake is declared to be a German dentist, Dr Peter Fischer, operating in Bucharest and Berlin. Media generally doubt that Fischer would be the final beneficiary of the 39.2% stake, questioning his financial resources for the deal.
The EBRD has already received approval from the central bank to increase its stake in Victoriabank up to 100% but it is likely to still have a fight on its hands. Moldova’s central bank has also issued approvals for two Moldovan businessmen to purchase significant stakes in Victoriabank. American-Moldovan citizen Vaja Jhashi, the owner of Trans-Oil Group, was given permission to take over more than 50% of the bank’s shares, according to newsmaker.md.